Homework Answers
The shutdown point for a firm is where the price equals the average variable cost, if the price is below the average variable cost the should shutdown the production. This is because if the price is below the average variable cost the firm is not even covering its variable cost.
On other hand, if the price is above the average variable cost a firm can produce in the short run and not in the long run.
Ans: d). Firm suffer losses and the price is above variable costs.
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A firm should not necessarily shut down if: Select one: a. firms suffer losses and the...
To minimize losses in the short run, a perfectly competitive firm should shut down if… a....
To minimize losses in the short run, a perfectly competitive firm should shut down if… a. total revenue is less than total cost (TR < TC). b. total revenue is less than total fixed cost (TR < TFC). c. total revenue is less than the difference between total fixed cost and total variable cost (TR < TFC - TVC). d. total revenue is less than total variable cost (TR < TVC).
Question 16. Where is the shut down point in one of the following? Select one: a....
Question 16. Where is the shut down point in one of the following? Select one: a. Price is equal to average variable cost. b. Price is equal to average total cost. c. Price is between average total cost and average variable cost. d. Price is above average total cost. Question 17. Which of the following best descibes the relationship between supply curve and the marginal cost curve for the purely competitive firm in the short run? Select one: a. The...
8. In the short run, a perfectly competitive firm will shut down if it is producing...
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is...
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is perfectly vertical. maybe downward or upward sloping, depending upon the type of product offered for sale. In the short run, the best policy for a perfectly competitive firm is to Question 17 options: shut down its operation if the price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its...
Fixed costs are irrelevant in the decision about whether to shut down production in the short...
Fixed costs are irrelevant in the decision about whether to shut down production in the short run because fixed costs: do not affect, and are not affected by, the quantity the firm produces. can be paid off over time. only change when production changes only change in the short run |If a profit-maximizing perfectly competitive firm shuts down in the short run, it incurs no losses. it incurs an economic loss equal to total fixed cost. its profit equals zero....
Should a firm shut down if its weekly revenue is ?$1,000 its variable cost is ?$600...
Should a firm shut down if its weekly revenue is ?$1,000 its variable cost is ?$600 and its fixed cost is ?$1,500 of which ?$250 is avoidable if it shuts? down? ? Why? The firm should A. produceproduce because revenue of ?$1,000 is greatergreater than avoidable costs. B. produceproduce because revenue of $1,000 is greatergreater than variable costs. C. shut downshut down because revenue of ?$1,000 is less than fixed costs. D.produce because revenue is positive. E.shut downshut down because...
This Competitive Firm [Select] * earning profits. They [Select] 4 at the shut-down print because the...
This Competitive Firm [Select] * earning profits. They [Select] 4 at the shut-down print because the AVC is [Select] the MR curve. COST OUTPUT This Competitive Fire [Select ] earning profits. They is not [Select) at the shut-uvir point because the AVC is [Select] the MR curve. COST 30 40 60 OUTPUT This Competitive Firm [Select] earning profits. They at the shut-down point because the AVC is ✓ [ Select ] are are not the MR curve. / N COST...
two price-taking firms compete by setting quantities of output, then Select one: O a marginal revenue...
two price-taking firms compete by setting quantities of output, then Select one: O a marginal revenue is the same as the market price. b. social surplus will be maximized. O c. the market price will be climater than marginal cost. Od they will produce the same amount of output as in perfect competition. If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long run resource mobility, then...
44. Under both perfect competition and monopoly, a firm: a. is a price taker. b. is a price maker. c will shut down...
44. Under both perfect competition and monopoly, a firm: a. is a price taker. b. is a price maker. c will shut down in the short-run if price falls short of average total cost d. always earns a pure economic profit. e.) sets marginal cost equal to marginal revenue. 45. True/False. In the long run, all inputs AND costs are variable. a. True b. False 46. True/False. Marginal cost is calculated by dividing the change in total cost by the...
A firm will shut down in long-run if the a. Firm is making zero economic profits....
A firm will shut down in long-run if the a. Firm is making zero economic profits. b. Price is anywhere above the the minimum average variable cost (AVC) c. Price is above the minimum average total cost (ATC) d. Price is equal to the minimum average total cost (ATC) e. Price is anywhere below the minimum average total cost (ATC)
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
Fixed costs are irrelevant in the decision about whether to shut down production in the short run because fixed costs: do not affect, and are not affected by, the quantity the firm produces. can be paid off over time. only change when production changes only change in the short run |If a profit-maximizing perfectly competitive firm shuts down in the short run, it incurs no losses. it incurs an economic loss equal to total fixed cost. its profit equals zero....
This Competitive Firm [Select] * earning profits. They [Select] 4 at the shut-down print because the AVC is [Select] the MR curve. COST OUTPUT This Competitive Fire [Select ] earning profits. They is not [Select) at the shut-uvir point because the AVC is [Select] the MR curve. COST 30 40 60 OUTPUT This Competitive Firm [Select] earning profits. They at the shut-down point because the AVC is ✓ [ Select ] are are not the MR curve. / N COST...
two price-taking firms compete by setting quantities of output, then Select one: O a marginal revenue is the same as the market price. b. social surplus will be maximized. O c. the market price will be climater than marginal cost. Od they will produce the same amount of output as in perfect competition. If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long run resource mobility, then...
44. Under both perfect competition and monopoly, a firm: a. is a price taker. b. is a price maker. c will shut down in the short-run if price falls short of average total cost d. always earns a pure economic profit. e.) sets marginal cost equal to marginal revenue. 45. True/False. In the long run, all inputs AND costs are variable. a. True b. False 46. True/False. Marginal cost is calculated by dividing the change in total cost by the...
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